Swashbuckling Madrid—the Spanish capital since 1561—celebrates itself and life in general around the clock. A vibrant crossroads, Madrid has an infectious appetite for art, music, and epicurean pleasure, and it's turned into a cosmopolitan, modern urban centre while fiercely preserving its traditions.

The modern city spreads east into the 19th-century grid of the Barrio de Salamanca and sprawls north through the neighborhoods of Chamberí and Chamartín. But the Madrid you should explore thoroughly on foot is right in the centre, in Madrid's oldest quarters, between the Royal Palace and the midtown forest, the Parque del Buen Retiro. Wandering around the sprawling conglomeration of residential buildings with ancient red-tile rooftops punctuated by redbrick Mudejar churches and grand buildings with grey-slate roofs and spires left by the Hapsburg monarchs, you're more likely to grasp what is probably the city's major highlight: the buzzing bustle of people who are elated when they're outdoors.

And then there are the paintings, the artistic legacy of one of the greatest global empires ever assembled. King Carlos I (1500-58), who later became Emperor Carlos V, made sure the early masters of all European schools found their way to Spain's palaces. The collection was eventually placed in the Prado Museum. Among the Prado, the contemporary Reina Sofía museum, the eclectic Thyssen-Bornemisza collection, and Madrid's smaller artistic repositories—the Real Academia de Bellas Artes de San Fernando, the Convento de las Descalzas Reales, the Sorolla Museum, the Lázaro Galdiano Museum, and the CaixaForum—there are more paintings than anyone can admire in a lifetime.

But the attractions go beyond the well-known baroque landmarks. Now in the middle of an expansion plan, Madrid has made sure some of the world's best architects leave their imprint on the city. This is the case with Jacques Herzog and Pierre de Meuron, who are responsible for a new arts centre, CaixaForum, opened in 2008 across from the Botanical Garden. Major renovations of the Museo del Prado and the Centro Reina Sofía are by Rafael Moneo and Jean Nouvel, respectively. Looming towers by Norman Foster and César Pelli have changed the city's northern landscape. Other projects include the daring renovation of the whole area of Paseo del Prado, which has been entrusted to Portuguese architect Alvaro Siza (after several delays, the project is expected to kick off in 2012 or 2013), and the Madrid-Río project, which has added new green spaces along the banks of the Manzanares river.

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